The management of Magnificent Modems, Inc. (MMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 3,000 and 6,000 units. The static budget is shown in the following form. Required a. Complete the following worksheet to prepare the appropriate flexible budgets. b. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 6,000 units. c. Indicate whether each variance is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Cost per MAGNIFICENT MODEMS, INC. Flexible Budget Income Statements Static Flexible Budgets unit Budget 5,000 3,000 6,000 $ 120 $ 600,000 Volume Variance Number of units Sales revenue Variable manufacturing costs: Materials 40 200,000 125,000 Labor 25 Overhead 4 20,000 Variable selling, general & administrative 30,000 Contribution margin 225,000 Fixed costs: 50,000 60,000 Manufacturing rent Depreciation on manufacturing equipment Selling, general & administrative expenses Depreciation on administrative equipment Net income (loss) 71,950 12,000 $ 31,050 $(58,950) $ 76,050